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Building Permits are Very Important to Buyers

What is the downside of purchasing a property that has had improvements performed without a Building Permit?

If you are purchasing a home or commercial property you should carefully check if any additions or improvements to the property were made after the original construction. If you don’t research the status of past and current Building Permit activity for the property with the local Building Department having jurisdiction for the property, you could be at risk if you purchase.

Local municipalities issue building permits for work that could affect the public’s health or safety if improperly performed. In order to obtain a permit, certain information must be provided to the local Building Official having jurisdiction. Intermediate and final inspections may need to be performed by their inspectors to verify that the work was performed in accordance with applicable Building Codes.

Plans and specifications prepared by an Architect or Professional Engineer describing new work or alterations are required for large projects where structural elements are involved or major electrical, air conditioning or plumbing systems are altered. Minor alterations may require a permit but usually do not require plans and specifications. The owner or a licensed contractor can obtain the permit by filling out a few forms and paying a small fee: The following common alterations or improvements require a building permit:

Making a structural addition

Installing a new roof

Blocking off or adding a door or window

Adding or relocating electrical outlets

Adding or relocating plumbing fixtures (sinks, toilets, showers)

Converting a garage or storage area to an air conditioned occupied space

Installing or replacing an air conditioning system

Many property owners and some contractors feel that they can make these changes without a permit; however, the local Building Official has the legal authority to require permits and impose penalties on a property owner and contractors for non-compliance. The problem doesn’t go away when the property is sold. The problem just gets transferred to the new owner.

The requirement for the permit is passed on to each subsequent buyer of the property.

If renovations were made by a property owner in 1985 that required a permit and the property was later bought and sold several times, the Building Official has the authority to force the "Current Owner" to obtain the permit and satisfy all code requirements. All previous owners including the one(s) that made the renovations are off the hook and the current owner becomes responsible for compliance. If you just purchased the property then you are now the “Current Owner”.

The Building Official can impose penalties on the current owner for non-compliance. That penalty is usually doubling the fee for the permit. The permit can be applied for by the current property owner or by a contractor but the problem sometimes doesn’t end with a simple payment of a permit fee. If construction documents and inspections would have been required to satisfy the original permit, these items must now be obtained as well. In addition, all work must now meet the current code?.not the code that was applicable in 1985.

Most small violations will likely go undetected by the building department. They are quite busy and don’t actively look into people’s homes or buildings. Lots of people add an electrical outlet or light fixture without a permit. Converting a garage to an extra bedroom is another common alteration quietly performed by homeowners without a permit. Even if the building department found out that these minor alterations were performed without a permit, one can easily remove or change them back to the original condition. No real harm?may be just a little fine or reprimand.

However, many construction projects require intermediate inspections and final inspections by the building department. After an un-permitted project is completed there may be items now hidden behind walls, floors and ceilings that can no longer be seen. The building department inspectors will not assume that everything was performed correctly in 1985 if they cannot now see the hidden items. They will not sign off on the inspection sheets.

The property owner is usually then told to have an Architect or Professional Engineer document that all work meets current code. Most Architects and Professional Engineers do not like to document someone else’s design. A General Contractor may need to get involved to disassemble, dig up or otherwise expose all elements that need to be inspected and verified. This process can cost three times what it would have cost to involve an Architect or Professional Engineer to design the original project and provide documents to obtain a permit and get it passed by the building department.

The current owner can be faced with additional fines and liens on their property if they do not resolve all issues and satisfy the permit requirements. Some property owners find it cheaper and easier to remove the addition or renovation and start from scratch with an Architect or General Contractor. Some people have recently had to have a brand new roof removed and replaced because the contractor did not pull a permit and have proper inspections. In any similar event you don’t want to be the one coping with the problem.

Learn how to avoid the potential problem.

If you employ a Home or Building Inspector to inspect the property prior to your purchase you should ask them if there is any evidence of work that might not have been permitted properly. If you employ a Real Estate Attorney they can help you research records in the Building Department or you can call or go to the Building Department yourself and ask them to look up permit activity and the status of final inspections for the address of the property you are interested in purchasing.